The thing about dividend investing is that there is no fix rule used to evaluate all dividend stocks. At the end of the day, dividend stocks are still stocks and they are affected by the same rules as all other stocks.
Having more time during this year end break, i thought of checking out some stocks that enables me to hold 30-40% of my portfolio for longer term (compare to my trading portion). The criteria is that
- I should not have more than 4-5 stocks so that following up with them doesn’t take up all my days and weekends (i still have a day job. I don’t want so much distractions)
- The stocks should provide a reasonable yield given the low-moderate risk taken to provide steady returns for the portfolio
- The stocks should hold up to shocks better than the majority of the stocks. Meaning they should fare better in a recessionary environment
To me Telecom stocks listed on the SGX provided just that. Singapore wants to attract foreign investments and wants to be the numero uno in terms of Financial,Business and higher value industry. For that to happen they know that communications and a good IT infrastructure is a must.
The 3 telecoms stocks in Singapore:Singtel, Mobile One and Starhub have pushed the communiations in Singapore to new heights in the past 10 years and for Singapore to be a success tomorrow they will have important roles to play as well.
The 3 telecoms stocks for the past few years have proven to be able to sustain their operations, profits and dividends even through the present economic crisis thus proving their business model is sound enough to weather this kind of storm. Their stock price although have fallen as the general markets do have been less than the average and presented a good opportunity to pick up for good future yields.
However, looking into the future, the industry and landscape will prove challenging as well as present opportunities for each of them as well.
- I will first give a comparison between the 3 telcos
- Then follow by a look at the economics of these telecom stocks
- Lastly, some tidbits on what the future might hold for investors or would be investors of these telecom stocks.
Comparing Singapore Telecom Stocks
I took the opportunity to delve abit into the figures of the 3 telcos Singtel,Starhub and M1. The basis of comparison is similar to the metrics that i use for my Dividend Stock Tracker (Follow my Dividend Stock Tracker updated nightly here)
It will also be a good opportunity for me to explain some of the metrics that i use to compare dividend stocks.
But first here are the historical data for the 3 telcos that i have compiled. The prices are taken on 1st of June for each of the years.
Singtel have the most data dating back to 2000 so effectively have 10 years worth of data.
- Singtel Data (Click to view large)
Mobile 1 (M1) IPO in end 2002 so we have 6 years of data.
- M1 Data (click to view large)
Lastly Starhub ipo in end 2004 so we have 4 years worth of data.
- Starhub Data (click to view large)